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Chinese business etiquette

So, you want your business negotiations to be a success in China. You have read a book or two on the subject, perhaps even read Sun Tzu’s ‘The Art of War’, but how do you negotiate that price down, or sell that extra widget?

The following are some tips that might help you crack the elusive China market:

The Business Meeting

No surprises:
Make sure that what is to be discussed is made clear beforehand.

Don’t be late!
Punctuality is considered a virtue. Guests are greeted upon arrival by a representative and escorted to the meeting room; hosts are expected to be in place before guests arrive.

To the right:
The principal guest is usually seated to the principal host’s right, on a sofa or chairs opposite the door.

What’s in a name?
Names are very important to the Chinese and you must establish how to address someone during your first meeting. Chinese surnames come first, not last.

Call a Chinese person by the surname, followed by a title such as Mr (Xiansheng) or Miss (Xiaojie) or even Director (Zong) or Manager (Jingli). So for example, Mr Wang would be Wang Xiansheng, or even Wang Zong, i.e. Director Wang.

Business cards:
Have a plentiful supply, you’ll need them!! Business cards should be exchanged at the beginning of a business meeting. Try and have one side of your card in Chinese and you will score extra points. If you don’t have a Chinese name, ask someone you like to help you choose one!

On accepting a business card from your Chinese colleague make sure you use both hands to receive it and show your interest by taking some time to read the details of the card.

Putting the card immediately into your wallet or briefcase without reading it is an unforgivable insult to the Chinese business culture.

Don’t forget the small talk!
Avoid the temptation to disclose your strategy at first. Start out with general observations or questions. Chinese like to take their time getting to know you, getting a feel of who you really are.

Wining and dining often comes first. This is all part of the guan xi building process or making ‘connections’, crucial before getting down to the nitty-gritty. Deals are rarely closed on first meetings.

Speaking:
Speak slowly and use short sentences.

Do not become agitated if there are pauses in speech on the part of the Chinese. This is an accepted custom and the pauses are a sign of measured and considered thought in Chinese culture.

Do not expect an immediate reaction from your Chinese colleagues. The Chinese like to consolidate their position in a measured and considered fashion.

Also, avoid slang and colloquialisms; it is unlikely you will be understood.

Do not interrupt:
Remember who holds the floor and do not interrupt the speaker.

Never put anyone on the spot:
Always offer a way out so your counterpart can preserve face.

Just saying No:
Actually, never say NO, try and find more indirect ways of saying it, such as, ‘I will have to look into that, or, I am not sure we could do that.

Saying Yes:
Don't take your Chinese counterparts’ saying "yes" literally to mean affirmative, Chinese people have a habit of saying "yes", or nodding their heads, to show that they're paying attention or that they're following what you say. In such a context, the word "yes" does not mean that they agree with what you say or with your terms.

Have a good interpreter:
This can help you immeasurably in China. But make sure you have thoroughly briefed your interpreter beforehand and make sure he/she understands any special technical words you might use.

Always talk to the host, never directly to the translator.

One-on-one’s:
Chinese people tend not to express what they have in mind in public. But when they're with you on a “one-on-one” situation without other people around, they're direct and straightforward.

If you want to know the truth — and how you can successfully do business with your Chinese partner/supplier — learn to pull people aside and talk with them privately.

Ongoing:
If you have an ongoing relationship and need someone in your firm to represent you, make sure you introduce them in person to your Chinese counterparts.

The Chinese place great emphasis on personal introductions as the basis of trust.

Miscellaneous:

Colours:
Avoid White; it is the colour or mourning. Red, suggests power, prosperity and authority, and is the preferred colour in China.

Let them smoke:
There are 350 million people who smoke in China. They consume 1.8 trillion cigarettes each year, or one-third of cigarettes smoked worldwide. Many Chinese consider smoking, usually among men, the right thing to do in a business environment. Let them do it!

Talk metric:
Supply technical and pricing information in metric units. Your customers and suppliers will appreciate and understand you better this way.

36 Stratagems

The Thirty-Six Strategies are a collection of 36 Chinese proverbs used to illustrate military strategy and tactics.

Stratagems are clever, sometimes unconventional solutions to a problem and are normally at the level of tactics.

To the Chinese, business is very similar to warfare and they therefore refer to their ancient texts for advice.

Most Chinese strategies and tactics are based on three concepts:

1. There is rarely a good reason to let your competitor know what you are doing, and there may be very good reasons to mislead your competitor as to your intentions

2. Do not play the competitor's game. Instead find out where your competitor is weak and attack them there.

3. Determine your competitor's tactics, just because someone is being friendly does not mean they should be trusted - they may have ulterior motives.

Planning to get products manufactured in China?

If you are planning to visit China to purchase products or have products made here, we hope the above information on business etiquette will have been helpful to you. If you are commited to "going-it-alone" you should budget for regular monthly, bi-monthly visits to check your orders and the quality of the products you are having manufactured. This is the only "go-it-alone" strategy that works in dealing with China. The market is littered with unhappy buyers who do a once or annual purchasing trip to China and then find, to their empty pockets, that they didn't get what they bargained for. Our last advice is Buyer Beware!

Although the Chinese currency, the Yuan or RMB, has revalued against the US$ and other Western currencies, manufacturing in China is still amazing value. Not only is manufacturing relatively inexpensive but China has the most amazing supply chain of every conceivable manufacturing process and available components. If you plan to have products manufactured in metal or plastics in China you may wish to consider an alternative route than "going-it-alone".

Chinasavvy, who celebrated their 10 years anniversary location in China at the beginning of 2013, is a Western owned and managed metal and plastics sub-contract manufacturing company in the heart of industrial China. We manufacture and deliver world-class quality parts and products for US, UK, Australian (and many other countries) customers who need ISO-9001 quality at China prices.

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